Just how far could corn and beans rally? (30$ Beans and 10$ Corn?)

Agriculture Online ^ | 12 March 2004 | Bryan Doherty

[shrinkermd]

Typically, whenever you hear bold predictions of how high prices can reach, we think it is in your better interest to ignore these. Nonetheless, one cannot help but conjure up projections of where corn and soybean prices could go this year in a weather market. Specifically, we wanted to look back historically at some of the gigantic upward price moves, and then try and correlate those with today's market.

How about $30.00 beans and $10.00 corn? Obviously, we run the risk of sounding wildly optimistic, even eccentric, but we want to put in context just how we derived these figures and why it is possible that, sometime in the near future, the corn and bean markets could see unprecedented rallies. We will start with soybeans. In 1973, soybean prices were trading between $3.00 and $3.50. Within months, prices rallied to $12.90, or about a three and a half-fold increase. Take today's price level of $9.00, and that equates to $31.50 per bushel. The obvious question: Is that even possible? Well, was $12.90 beans possible in 1973? By June 1973, this was a reality.

Corn prices peaked in 1996 at $5.545. Prior to that peak, prices were trading near $2.20 just a year and a half earlier. Futures rallied more than two and a half times from where they started. Using simple math, take $3.00 per bushel multiplied by two and a half and you have a rally to $7.50. In 1971, prices bottomed at $1.10 per bushel and within three years traded to $4.00 or just underneath a three-fold rally. Tack on another $1.00 to $2.00 for an emotional blow-off top this year, and you have corn approaching $10.00

[shrinkermd]

FYI

[krb]

Is this how farmers get excited?

[joesnuffy]

Keep on adding to the cost of getting them planted..weeded...de bugged...and then harvested
just due to fuel costs...

[annyokie]

I'm Captain Jenks of the Horse Marines.

I feed my men on corn and beans.

I often go beyond my means

'Cause I'm Captain in the Army.

[Libertarianize the GOP]

ping

[farmfriend]

Rights, farms, environment ping.
Let me know if you wish to be added or removed from this list.
I don't get offended if you want to be removed.

[greydog]

It seems that finally Archer Daniels Midland has acquired enough farmland to have crop prices look better.

[Ben Hecks]

"I'm Captain Jinks of the Horse Marines,
I feed my horse on corn and beans"

(sorry, I couldn't resist the old song lyrics)

[azcap]

What a brilliant article?? The genius writer makes the bold prediction that if there is terrible harvest or huge weather catostrophe that the price of grain will go up.
Let me go out on a limb and make some incredible economic predictions of my own:
1. If there is a civil war in Iran the price of oil will go up.
2. If there is an outbreak of Mad Cow Disease in Texas the price of Beef will go and up.
3. If terrorists nuke Switzerland the spot price of cuckoo clocks will sky rocket.

 

[Fiddlstix]

Is this how farmers get excited?

Yep! Sure is. J

[Ernest_at_the_Beach]

Whats the price of wheat though?

Got a brother in law farming x thousand acres of wheat ground, some irrigated and he says he is living off of government money cause prices are so low.

He doesn't like being wired to the subsidies.!

[HP8753]

Got a brother in law farming x thousand acres of wheat ground, some irrigated and he says he is living off of government money cause prices are so low

Old Joke:

How do you starve a farmer?

You weld his mailbox shut.

[squidly]

Is this how farmers get excited?

You betcha

[Ernest_at_the_Beach]

LOL!

[MarkM]

Yes, this is how farmers get excited. Soybeans are already at $9.00/bu and that means good times for the rural midwest if they stay above $8 for a while, like till harvest time next fall. If prices stay up for a while its probably good news for Bush and the GOP.

[E.G.C.]

BTTT!!!!!!

[getgoing]

LOL, even gets the farmers daughter excited!

[q_an_a]

stop that!! you are not paid to be so smart! only a licensed news writer or news reader is allowed to pontificate about the future. in addition, your comments sound like rational person and he sounds like a liberal Rat. /sarcasm off

[clodkicker]

Most farmers sold their beans at $7. That is the main reason prices will go up.